A company has two production departments and two service departments (Maintenance and Stores). The overhead costs of each of the departments are as follows. The following equations represent the reapportionment of each of the service department overheads to the other. M = 4,700 + 0.1S S = 5,800 + 0.2M Where M = total Maintenance overhead after reapportionment from Stores S = total Stores overhead after reapportionment from Maintenance 60% of the total Maintenance overhead and 50% of the total Stores overhead are to be apportioned to Production Department 1. The total production overhead for Production Department 1 after reapportionment of the service departments' overhead costs is closest to:
A) $71,672
B) $75,500
C) $70,720
D) $71,821

Question

A company has two production departments and two service departments (Maintenance and Stores). The overhead costs of each of the departments are as follows.  The following equations represent the reapportionment of each of the service department overheads to the other. M = 4,700 + 0.1S S = 5,800 + 0.2M Where M = total Maintenance overhead after reapportionment from Stores S = total Stores overhead after reapportionment from Maintenance 60% of the total Maintenance overhead and 50% of the total Stores overhead are to be apportioned to Production Department 1. The total production overhead for Production Department 1 after reapportionment of the service departments' overhead costs is closest to:
A) $71,672 
B) $75,500 
C) $70,720 
D) $71,821

Quizplus · Accepted Answer

The Answer of A company has two production departments and two service departments (Maintenance and Stores). The overhead costs of each of the departments are as follows.  The following equations represent the reapportionment of each of the service department overheads to the other. M = 4,700 + 0.1S S = 5,800 + 0.2M Where M = total Maintenance overhead after reapportionment from Stores S = total Stores overhead after reapportionment from Maintenance 60% of the total Maintenance overhead and 50% of the total Stores overhead are to be apportioned to Production Department 1. The total production overhead for Production Department 1 after reapportionment of the service departments' overhead costs is closest to:
A) $71,672 
B) $75,500 
C) $70,720 
D) $71,821

A Company Has Two Production Departments and Two Service Departments